Whether you’re buying or selling a home, you’ve probably heard the word appraisal thrown around. But why do you need an appraisal? An appraisal is an estimation of a property’s market value by a professional to ensure the loan amount a person is asking for is appropriate for the home. Since an appraisal is required for all mortgage approvals, it is important to schedule an appraiser to come out quickly after applying to keep the loan process moving.
During an appraisal, many factors are looked at to determine the value of the home. The interior and exterior condition of the property, any amenities such as pools, finished basements or extra buildings and the layout of the property are some of the main points an appraiser will look for. After looking over the property, an appraiser will look at the neighborhood and market value of the properties to better determine the value of a specific home.
Once the appraisal is finished, the results will be available to you and your loan officer. Be sure to keep a copy in your files. If the amount of the appraisal is equal to or less than the loan requested, the process can move forward. If the appraisal values the home at a lower value than the loan requested the buyers have three options: ask the seller to accept a lower price, pay more out of pocket or renegotiate the contract offer.
Appraisals are regulated to keep them unbiased and fair. While all appraisals need to be done by someone knowledgeable and reputable, you typically cannot choose an appraiser yourself. First Ohio Home Finance will provide an appraiser who is experienced with the areas and neighborhoods you’re looking, have at least five years of experience and are insured. Learn more about appraisals with First Ohio Home Finance.